Jewelry and gift seller Tiffany & Co.'s net income more than doubled in the first quarter as its revenue rose in the U.S. and soared 50 percent in Asia, the company said Thursday.
Tiffany, based in New York and known for its silver jewelry and signature turquoise gift boxes, also forecast higher full-year profit than Wall Street expects.
The robust earnings report offers signs that affluent shoppers are keeping their spending up, even buying jewelry for more than $50,000 apiece, after they pulled back during the depths of the recession. The company cautioned that spending is being compared to sharp declines from a year ago. Chairman and CEO Michael J. Kowalski said "it is prudent to maintain a modicum of caution in our outlook due to global economic uncertainties."
Kowalski said the chain plans to build on this "exceptional" performance by expanding and introducing new products to take market share from rivals.
The jeweler said it earned $64.4 million, or 50 cents per share, in the three months ended April 30. That compares with $24.3 million, or 20 cents per share, a year earlier.
Its revenue rose 22 percent to $633.6 million.
Analysts surveyed by Thomson Reuters expected earnings per share of 36 cents on revenue of $611.9 million.
Revenue in the Americas increased 22 percent to $315.3 million. That compares with a 31 percent drop in the year-ago period. Adjusted for currency fluctuations, revenue rose 20 percent, and revenue at stores open at least a year rose 15 percent, led by the flagship store on New York's Fifth Avenue, where the figure rose 26 percent.
Other branch stores open at least a year saw revenue rise 13 percent, while Internet and catalog revenue in the Americas rose 23 percent.
More than half of the revenue growth came from increased spending by U.S. customers with a smaller contribution from foreign tourists, who reduced their travel to the U.S. because of the volcanic eruption that disrupted global air traffic, Mark Aaron, vice president of investor relations told investors during the conference call.
Company officials noted that customers spent across a wide variety of product categories; it saw considerable growth in jewelry priced over $50,000, a category that was the most depressed a year ago. It also reported an increase in transaction size.
Revenue at stores open at least a year is considered a key indicator of a retailer's health because it isn't skewed by expansion or stores closing.
In the Asia-Pacific region, which doesn't include Japan, Tiffany's revenue soared 50 percent to $122.3 million. During the first quarter, the company opened its third store in Shanghai; by the end of the period, it operated 11 stores in China. Company officials said that they plan to have a total of 30 stores in China within the next five years.
In Japan, revenue slipped 2 percent to $115 million. Business in Europe rose 25 percent to $68.6 million.
Tiffany said it now expects profit for the year to be $2.55 to $2.60 per share, up from the original $2.45 to $2.50 per share. Analysts surveyed by Thomson Reuters expects $2.50 per share.
Tiffany expects revenue to be up 11 percent for the year. With annual revenue of $2.71 billion last year, that would mean it projects $3.01 billion for the current year. That is in line with analysts expectations.
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